The Tuscaloosa Shale Of Louisiana And Mississippi

The Tuscaloosa Shale is a rock formation underlying much of central Louisiana and southwest Mississippi which has oil and gas production potential. It is a shale, which is typically a source rock for oil and gas reservoirs. In recent years, oil and gas exploration companies have had success with unlocking the key to producing various shales, such as the Barnette shale (called a shale play) around Fort Worth, Texas. In the past, shales were known in the oil and gas business as source rocks for oil and gas. Hence, with modern day production, their being called an unconventional resource. Because the reservoir is not a sandstone, limestone or dolomite, typical reservoir rocks.

The Tuscaloosa shale was named for Tuscaloosa, Alabama, the city near where it outcrops at the surface of the land. This is common. Rock formations were usually named by long-gone geologists for the town or city near an outcrop. Sometimes, the formation was named for the town or city close to the discovery well for oil or gas production from that formation.

The Tuscaloosa shale is very impermeable, known as "tight" in oilfield jargon. But, with horizontal drilling and hydraulic fracturing technology, E & P companies are producing oil and gas in commercial quantities in other parts of the USA, such as the aforementioned Barnette shale, the Haynesville shale of northwest Louisiana and East Texas, the Bakken shale of North Dakota and Montana and the Eagle Ford shale of south Texas. The Tuscaloosa shale is close to being the stratigraphic equivalent of the Eagle Ford shale.In the past 30 years, commercial natural gas was found downdip from the Tuscaloosa shale play, in Tuscaloosa sandstone reservoirs. Prolific natural gas production was discovered on some leases. Presently, widespread commercial production from the Tuscaloosa shale is hoped for but not proven. We do know that oil and gas is present within the shale, but more wells will have to be drilled and tested before we know if it will be successful. At time of this writing, several exploratory wells are drilling in south Mississippi and central Louisiana. Within the next year, we will know far more about the commercial potential of the Tuscaloosa shale.

As with the Eagle Ford shale, the Tuscaloosa shale play is based on the idea that both crude oil and natural gas can be produced profitably. As opposed to shale plays such as the Haynesville, which produce only dry gas. The reason this matters is because, at this time, crude oil price is much higher, on a relative basis, than natural gas. Companies are taking drilling rigs away from the Haynesville shale and deploying them in the Eagle Ford and other liquids-rich plays. So, if the Tuscaloosa shale turns out to be profitable, Louisiana will not only have a huge natural gas field but a huge crude oil field.

Options For Mineral Rights Owners

Those who own mineral rights and royalty rights in the Tuscaloosa shale have a couple ways to make money from it. First, they can sign a contract with an oil and gas company, an Oil, Gas & Mineral Lease. An "oil lease" has two primary income sources, the lease bonus and a royalty provision. A lease bonus is a "signing bonus," on a per net mineral acre basis, provided to the mineral owner for executing the lease. Second, if oil and/or gas production is found, royalty payments will be paid to the mineral owner. There is a third way but it is not very common these days, and that is a rental payment. Most modern leases are paid up leases, meaning no annual rental is due.

As for how to get an oil and gas lease on your property, it is generally not feasible for a mineral owner to try to contact oil companies as they are, generally, not open to solicitation from mineral owners. The best way is to hire an oil and gas consultant or landman. (Example)

The other option is to wait and hope. That is, in general, how the oil business operates. Oil companies have a scientific staff consisting of geologists, geophysicists and petroleum engineers that are constantly applying their science to find areas that they feel are prospective for oil production and/or natural gas production. Thus, the fact that you own some land that is open for leasing is of no concern to them. If you own, say, 10,000 acres, in an oil and gas producing regions, that's another matter. But, for most mineral owners, being proactive is not going to get you anywhere. But, as mentioned above, an oil and gas consultant or landman that specializes in putting deals together and has many years of experience and many oil biz contacts can often get you a deal. There are many variables that dictate whether he can take your project or not. An example is this one that was very active in the Haynesville shale and is now aggressively pursuing the Tuscaloosa shale and other oil plays in the USA -- see this oil and gas landman consultant.

The second option for a mineral rights owner to receive money is by selling mineral rights. Since the early days of the oil business, individuals have bought and sold mineral rights. For some, it can be a viable option, especially in Louisiana. Louisiana has a very unique law which favors the landowner. If you own land in Louisiana and sell the minerals, the mineral rights or royalty rights revert back to you in ten years if drilling or production does not occur within ten years of the sale. In other states, a sale of mineral rights is permanent. But, a sale often brings a very significant sum of money.

Here is an article, "Why Sell Mineral Rights?" One can sell mineral rights whether his minerals are leased or not. And, he can sell his undivided interest, regardless of what the other mineral owners do. People have various reasons for seeking a sale of mineral rights, from wanting or needing cash to purchase something, to provide for a child's education or for their own retirement, or just to breathe easier in the day to day struggle to make ends meet. And if the Tuscaloosa shale becomes commercial, selling mineral rights can bring a nice payday. (Mineral rights blog)

If you are inexperienced at mineral rights matters, it's best to get a professional to help you get the most out of your mineral rights (or royalty rights), such as this oil and gas consultant. A consultant will work with you to help you obtain a lease, help you to negotiate a lease offer, or help you sell mineral rights or royalties if that is your desire.

Or, you can just call the number below for help with your oil and gas matters in the Tuscaloosa shale. Best of luck!